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Letter to the editor

It's a new - and costlier - era

A typical family earns a lot more than a generation ago but is closer to bankruptcy than ever.

By Becky Bowers, Times Staff Writer
Published January 7, 2008

A typical family earns a lot more than a generation ago but is closer to bankruptcy than ever.

You could blame out-of-control spending and easy debt, but Elizabeth Warren, a bankruptcy expert at Harvard Law School, has a simpler explanation. Basic costs, such as housing and health care, have soared, while less essential spending - for clothes or appliances or takeout meals - has stayed about the same, her research shows.

Sara Severn, a 37-year-old reading teacher in Safety Harbor, says that when she was a kid in Colorado, just her dad worked to support four kids. Now, she and her husband put in a combined 100 hours a week to provide for three sons, ages 11, 14 and 16. And she still feels financial pressure, she says. "It's that pressure of college and funding our own retirement." That's if everything goes right. An unexpected illness or job loss could make it all unravel. "What more could we give?" she asks.

That sense of being on the financial edge is familiar to two-income families, Warren says. Debt has been a short-term fix - but a painful one. She suggests paring not the latte but the mortgage payment.

$22,890 fixed costs + $19,560 discretionary income = $42,450 single-income family in the early 1970s

$55,660 fixed costs + $18,110 discretionary income = $73,770 dual-income family in the early 2000s 

[Last modified January 6, 2008, 19:42:22]